We've known that Microsoft has been working on a music service for a while now, and we finally got a chance to check it out first hand. Xbox Music is exactly what you'd want in a streaming service and store. It's complete in a way that Spotify, Amazon, and even iTunes aren't. Microsoft's new music platform is wonderful, basically.

That is, if everything you use is powered by Microsoft. Otherwise? You'll be waiting a while.

Let's start with what it is. Xbox Music, which launches on the Xbox tomorrow, is basically two separate services, joined together: Xbox Music Pass and Xbox Music Store. Music Pass is a streaming service that replaces Zune Music Pass with both a freemium tier and a $10 per month plan, similar to Spotify or Rdio. The freemium level gets you unlimited streaming to Windows 8 PCs or tablets, while the $10 subscription lets you download songs, and use the service on your Xbox and Windows Phone. The Music Store is similar to any other digital music store, like iTunes. And thankfully, it runs on money, not Microsoft Points.

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The difference is that the streamed music and your purchased music will sit side-by-side in your default music playing app. So you don't have to toggle back and forth between what you own and what's available to stream. That might sound like a relatively small deal at first glance, but only having one, consolidated library, app, and marketplace to deal with is a massive deal for how you actually use your music.

But for as great as it is, everything covered here is only going to be for Windows 8 and Windows Phone 8 users for the foreseeable future. Xbox Music isn't available on iOS or Android or OS X at launch. And Windows 7 and Windows Phone 7 and 7.5 won't be updated for it at all. That sucks. The official line on cross-platform is "within a year," with eyes toward getting it done much sooner than that, but for now, all this awesome multi-device functionality is only going to apply if you'using nothing but Microsoft gear.

The Almost-Perfect Cloud Service

On the streaming side, the service will be like other streaming services, Xbox Music's freemium period lasts for six months (and possibly longer depending on what deals Microsoft can cut when that runs out). At launch, it'll have 18 million songs available to stream in the US, and a total of 30 million globally, eventually in 22 markets (15 with free streaming at launch). As of July, Spotify was also available in 15 countries.

Adding streamed tracks to your library or playlists is handled by contextual options on albums, or individual songs. You can add to your overall library, or to individual playlists, or choose to download the song locally. You can also set your account to automatically download all the songs you add to your collection. You can't, though, add tracks to your overall library, and designate which of those you want to send to your phone (like on Rdio). It's either ship all of them, or download them one at a time from your phone.

Like Spotify, Xbox Music Pass also uses progressive download, as opposed to pure streaming, for better playback. Quality-wise, streamed music is sent at 192 WMA, and purchased music at 256 MP3. Wi-Fi wasn't great where I got a chance to listen to it, but the process of finding a song, playing it, and adding it to a playlist was really simple, and playback was consistent, considering how choppy the connection was.

For local music files that you add to your library, Xbox Music sort of works like Google Play Music, with a bit of iTunes Match thrown in. It uses a "scan and match" process to see if you've uploaded tracks that it has on file, and if it finds a match, you'll be able to stream it from the cloud, even if it's not available over XBM's streaming service.

Presumably, most of your tracks will get matched up. For any that aren't, you can still add them locally to your phone, but it'll be a while before you can stream them, like you can do over Google Music's pure audio locker system. So you won't be streaming any recorded lectures, or live music recordings you've transferred until Microsoft's "licensed locker" is turned on.

Music for Everyone (Kind of)

For a lot of people, Xbox Music is just going to seem like free music on their computer. Xbox Music is the default music player for Windows 8 (it wasn't in the RTM build we reviewed earlier this year), and its free mode is activated by default if you've set up Windows with a Live account that has a credit card associated with it. Users will be asked if they agree to the free trial, and that's it—one click and you're streaming music, for free. It's pretty awesome.

If you don't have a credit card on file, or haven't signed up, you'll be prompted to do the typical dance of signing in or registering, and then add a credit card, and then agree. And however you start the trial, it's set up to automatically start the $10 per month fee after your trial is up. All old Zune Pass subscriptions will automatically be changed into Xbox Music accounts, so anyone actually using Zune Pass won't have to worry about overlapping accounts.

It's an incredibly aggressive muscling in on Spotify, Rdio, Pandora, and others. The Smart DJ and Smart VJ features are being pushed as a replacement to Pandora, given the new streaming library. But again, no cross-platform is probably more than enough to keep most people with whatever they already use. Especially since Windows 7 and WP 7 and 7.5 won't get any of these new features.

On the Xbox

The "Xbox" in Xbox Music is kind of a misnomer. Yes, it's still more likely that a typical house will have an Xbox than an Apple TV, but the central premise of Xbox Music isn't a music service for your console. It's a consolidation and refinement of other services, mainly. But the Xbox functionality is still pretty cool. It's controlled by the SmartGlass app on Windows 8 tablets, or from Windows Phone.

You can play from your library or playlists, or use Smart DJ and Smart VJ, both of which have been upgraded from their previous incarnations, to play songs and videos based on stuff you're already playing. But that's not unique to the Xbox. And stuff like using the Kinect's voice commands is a neat parlor trick, but too laggy to really impress or be something you'd actually use regularly. The real benefit is how great everything looks. Playing a song on the Xbox 360 using Xbox Music is a million times more visually appealing than on Apple TV's ugly ass interface. The artist's photo, along with the album cover and song information are tiled dynamically across the screen, instead of Apple TV's lame black screen with a single photo.

But It Still Needs Work

All of this sounds great. So what's the bad news? There are a few levels of it. The first issue is the biggest, and also the most predictable. No cross-platform at launch is a disappointment, but it probably had to be this way. Both because Microsoft would want an exclusive service to launch with Windows 8, and because the licensing on that is going to be an enormous pain. You can probably believe Microsoft on the "under 12 months" thing, but for now, it's still a huge, huge deal. Windows Phone remains promising, but right now it still accounts for a comically small amount of people. A ton of people might have Xboxes, but for the most part, smartphones are what people want their streamed music on.

Another thing is that while the service's design is thoughtful and modern, it suffers from some of the same issues with limited options as Windows 8 as a whole. Syncing songs to your phone, locally, for instance, seems like a chore. A few more detailed options would make it a whole lot easier to navigate. It would be nice if the cloud support for unrecognized local files was ready right away too. These are small details, but they're the kind of stuff that adds up to make the overall experience feel incomplete.

Putting a one-click signup on Windows 8's front door is going to be tough for Spotify and Rdio to compete with. Unlike Windows Store competitors like Steam, there's nothing to stop anyone from jumping ship. Xbox Music is basically a no brainer if you're going to use Windows 8 and Windows Phone 8. There's almost zero reason to use anything else. But for the rest of us, so far, there's almost equally little reason to switch.